The Elder and Disability Law Firm, APC
Take wise steps with an unexpected inheritance
When a loved one dies in California, the beneficiary of a will needs to take a few important steps. The first step is to contact the executor or appointed administrator of the decedent's estate. It is important to ask the executor for a copy of the person's will and read the fine details.
The second step is to find out if the estate will go through the probate process. If the amount or earnings of the estate qualify for going through probate, a court looks at and authenticates the will. The probate court must follow through with the decedent's wishes as written in the will.
If the decedent left a large estate to a beneficiary, other relatives may choose to contest the will. In this situation, individuals may wish to retain the services of an estate planning lawyer. After paying any outstanding debts owed by the decedent, the executor distributes assets to the named beneficiaries. The dispensed money may or may not qualify as taxable income.
After receiving the money, the best thing is to pay off all debts. Heirs with considerable debt should make the decision to keep only one credit card and close out all the other credit card accounts. If there are any remaining assets after paying off every debt, it's wise to invest the money in a conservative mutual fund providing attractive monthly or quarterly dividends.
People often make serious mistakes after receiving their inheritances. The biggest mistake is to squander the money on alcohol, drugs or gambling. A person who has received a substantial inheritance may benefit by consulting with an estate administration and probate lawyer who offers legal and practical guidance.